Of business rescue and role of receivers in Tanzania19 – The Citizen
When a company borrows money from a bank, the financial institution typically takes security over assets of the firm to guarantee payment.
And regardless of the macroeconomic landscape in Tanzania, if the company fails to honour the terms of the loan or experiences financial difficulties, the bank with the security of a debenture (floating charge) over the whole or substantially the whole of the companys assets may find it necessary to appoint an administrative receiver.
It should be noted at the outset that claims of unsecured creditors are not dealt with in a receivership, but are normally dealt with in the consequent liquidation of the company. Administrative receivers have similar powers to the administrators described i…